The change in the method of temporary calculation of the usury thresholds was confirmed this Friday by the Banque de France, which finally admits certain blockages in the distribution of mortgages in recent months.
The establishment in charge of financial stability recognizes in particular, during the last months of 2022, variations in the distribution of credit distribution, with a threshold effect within each quarter. Some files, pending the next significant quarterly increase in the attrition rate, are thus postponed until the beginning of the following quarter. Since last summer, usury thresholds have been regularly overtaken by the rise in nominal rates charged by banks in a context of a sharp rise in their refinancing costs.
From February 1 and until July 1, 2023
Exceptionally during the current period of sharp rise in rates, the Banque de France thus proposes a calculation of usury thresholds no longer quarterly but monthly, from 1 February and until 1 July 2023. will remain established each month on the basis of the average of the rates charged during the previous three months.
The usury thresholds correspond to the maximum rates at which banks have the right to lend, by adding up the nominal rate, the borrower’s insurance, the application fees and the deposit. According to brokers, it takes a margin of at least 50 to 60 basis points between the nominal rate of a loan and its threshold of usury to pass the obstacle. For loans over a period of 20 years and over, the wear rate is currently 3.57%. However, the 25-year rates are already close to 3%, which could lead to new blockages.
Acceleration of rate hikes
With this new monthly calculation method, the usury thresholds should increase from February 1, which will give borrowers some leeway. On the other hand, this should accelerate the upward trend in borrowing rates until the banks find a balance to make this activity profitable.
For the broker Vousfinancer, this temporary change should allow a gradual rise in credit rates and avoid jolts. Vousfinancer admits that this risks contributing to the acceleration of the rise in credit rates which could reach 4% over 20 years as of this summer. But borrowing at 4% is better than being refused credit because of usury thresholds even though you meet the debt criteria and have a sufficient contribution.
We can also consider that this rise in rates will help real estate prices to land with the mechanical desolvency of certain buyers. Because it is this year that the production of real estate loans is likely to undergo a very marked contraction.